UK Banks Are Pulling Back On Overseas Lending

UK banks are pulling back from lending to overseas at a faster rate than any other country as they focus on the domestic market. Kristin Forbes, a member of the Monetary Policy Committee said that UK cross-border financial exposure has fallen about 23% since its peak, and is currently back at its late 2007 levels.

A possible effect of funding shortfalls created by reduced banking flows is a rise in ‘Shadow banking’ – which includes private lending.

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